Duke Capital Regulatory News (DUKE)

2 August 2021

Duke Royalty Limited

("Duke Royalty" or "Duke")

New Royalty Agreement with Engineering, Procurement and Construction Services Business

Duke Royalty, a provider of alternative capital solutions to a diversified range of profitable and long-established businesses in Europe and abroad, is pleased to announce that it has further broadened its revenue base by entering into an CA$8.3 million (approximately £4.8 million) royalty financing agreement (the "Financing") with Creō-Tech Industrial Group Inc. ("Creō-Tech").

Creō-Tech is a Canadian holding company that has been set up to acquire businesses that provide engineering, procurement and construction ("EPC") services in commercial and industrial settings. In connection with the Financing, Creō-Tech has acquired two businesses, Axial Inc. ("Axial" and together with its subsidiaries "Axial Group") and Silhouette Enclosures Ltd. ("Silhouette"). Axial is a provider of industrial automation and engineering services based in Calgary, Alberta, and Silhouette specialises in the design and fabrication of custom industrial enclosures and is based in Abbotsford, British Columbia.

Highlights:

· Duke has agreed a total funding commitment of up to CA$20 million (approximately £11.6 million) to support Creō-Tech's buy-and-build strategy to acquire profitable EPC businesses across Canada

· CA$8.3 million initial drawdown to facilitate the acquisitions of Silhouette and Axial, both of which have a longstanding operations and predictable revenue streams

· Initial cash yield of 13.2% per annum via monthly payments, which commence immediately

· 30-year secured financing, with distributions to be adjusted annually to reflect Creō-Tech's consolidated revenue growth, on typical Duke terms

· As part of the financing, Duke will take an initial 18.75% equity stake in Creō-Tech.

Neil Johnson, CEO of Duke Royalty, said:

"Since our successful fundraise in April, Duke Royalty has entered into three new partnerships, building on the record normalised cash revenue that we recently reported for the first quarter of our current financial year. This partnership is also Duke's first significant deal in North America, diversifying our geographic presence, as well as our revenue base. Duke's investment in Creō-Tech is consistent with our investment strategy in that it supports a buy-and-build model focused on the acquisition of long standing, profitable companies in an attractive and fragmented market with potential for additional follow-on investments.

"Duke is backing a strong management team in Creō-Tech. With significant industry experience they will look to identify and acquire profitable, private businesses, whilst driving growth and profitability across the group by realising synergies and pooling back-end functions."

Dirk Maritz, CEO of Creō-Tech, said:

"Duke's investment solution is a great fit for the Creō-Tech group of companies. It has provided a platform for Creō-Tech's growth both organically and through future acquisitions. We are excited to be partnered with Duke to execute on our clearly defined plan to create a multi-disciplinary, high quality EPC firm."

Further information regarding Creō-Tech:

Creō-Tech is a privately-owned group of companies offering innovative multi-disciplinary engineering & manufacturing applications in energy, power generation, material handling, mining, manufacturing & processing, telecommunications and utilities markets. In addition to its reputable manufacturing operation, Creō-Tech offers a full complement of services to the North American industrial mid-market, including structural, electro-mechanical, automation and technical support solutions. Creō-Tech offers a competitive advantage through customised approaches and innovative solutions, to meet client's needs. To learn more, visit creotechgroup.com.

Axial Group

Axial Group is a boutique, multi-disciplinary engineering firm offering clients EPC services in a wide variety of industries. Established in Calgary, Alberta in 1997, Axial Group has comprehensive industry expertise and technological capabilities, delivering innovative structural and electro-mechanical engineering, industrial automation and industrial IT solutions, in both new construction and retrofit environments. Axial Group has extensive global expertise, having delivered and managed projects both domestically and internationally.

Silhouette

Silhouette is a specialised leader in custom design and fabrication of industrial enclosures and control rooms. Silhouette, located near Vancouver, Canada with an 18-year history, works directly with its clients to customize structural and electro-mechanical designs, develop innovative acoustic and vibration solutions, and manufacture high-quality products. The company supplies products worldwide, with a primary focus in the Telecommunications, Utilities, Marine & Port, Material Handling, and customers in harsh or remote environments.

About the Financing

Duke has provided an initial investment of CA$8.3 million to finance Creō-Tech's first two acquisitions, Axial Group and Silhouette, with a total potential investment of up to CA$20.0 million to fund future acquisitions. As part of the financing, Duke will take an initial 18.75% equity stake in Creō-Tech. Future tranches of capital are planned at Duke's sole discretion.

The terms of the Financing are in line with Duke's typical investment criteria. The Financing is provided through a combination of a secured loan and preference shares and Duke will be entitled to monthly distributions (the "Distribution") beginning in August 2021.

In line with Duke's other investments, and reflective of the participating nature of Duke's business model, the Distribution will be adjusted annually based on the percentage change in Creō-Tech's total combined gross revenues for the 12 months to 31 December 2022, compared to the prior financial (calendar) year. The first adjustment will occur from 1 January 2023. The annual adjustment in the Distribution will be subject to an agreed collar, in line with Duke's typical terms.

The Financing is for a period of 30 years, with the Distribution payable to Duke throughout the duration of this term, unless Creō-Tech utilises an early buyback option which will trigger an early redemption payment to Duke.

Duke Royalty Portfolio

A full list of Duke's current Royalty Partners are now included for reference on our Partners page of our website: www.dukeroyalty.com/partners

This announcement contains inside information.

***ENDS***

For further information, please visit www.dukeroyalty.com or contact:

About Duke Royalty

Duke Royalty Limited provides alternative capital solutions to a diversified range of profitable and long-established businesses in Europe and abroad. Duke Royalty's experienced team provide financing solutions to private companies that are in need of capital but whose owners wish to maintain equity control of their business. Duke Royalty's royalty investments are intended to provide robust, stable, long term returns to its shareholders. Duke Royalty is listed on the AIM market under the ticker DUKE and is headquartered in Guernsey.